Breaking up is hard to do

Prime Minister & President

After months of dialogue – and at the eleventh hour – Prime Minister Theresa May and the UK’s negotiators reached a deal with the European Union (EU) that will finally allow floundering Brexit discussions to progress to the next stage.   As the EU leaders  agreed to move Brexit talks on to the second phase they still called for “further clarity” from the UK about the future relationship it wants.

Agreement was reached on three key issues: the future structure of the border between Northern Ireland and the Republic of Ireland; the rights of EU citizens in the UK and vice versa; and the UK’s financial liabilities resulting from Brexit.

• There will be no “hard border” between Ireland and Northern Ireland; moreover, if a trade deal cannot be reached, Northern Ireland will remain aligned with all the rules of the single market and customs union that support the Good Friday Agreement.
• Under the terms of the agreement, the rights of UK citizens in the EU and EU citizens in the UK to live, work and study will be protected.
• The UK and EU agreed a methodology to calculate the financial settlement, and the UK agreed to meet all its financial liabilities, including its contributions to EU budgets in 2019 and 2020.

European Commission (EC) President Jean-Claude Juncker described the deal as both a “breakthrough” and a “compromise”, while European Council President Donald Tusk commented, “Breaking up is hard.  But breaking up and building a new relationship is harder”.

The Confederation of British Industry (CBI) welcomed the announcement of the last-minute deal, but warned that many companies will need greater detail and “concrete assurances” if they are to be persuaded to pause in the execution of their Brexit contingency plans. Meanwhile, the British Chambers of Commerce (BCC) called for “answers on what leaving the EU will mean for regulation, customs, hiring, standards, tariffs and taxes”, and urged the UK Government and the EC to “do everything in their power” to ensure the continuation of “vibrant” cross-border trade.

Although the agreement has been hailed as a major breakthrough on both sides – albeit with compromises from both parties – there is still a great deal of discussion and negotiation to undergo before the UK’s exit from the EU can be described as settled.

Jean-Claude Juncker said the EU’s initial priority was to “formalise the agreement” that had already been reached before moving forward, adding “the second phase will be significantly harder and the first was very difficult”.

Donald Tusk warned that there is, in effect, less than a year left to thrash out “a transition arrangement and the framework for a future relationship”, and the UK remains committed to leaving the EU by the end of March 2019.

The first issue to be discussed, early next year, will be the details of an expected two-year transition period after the UK’s exit in March 2019. Talks on trade and security co-operation are set to follow in March.